Scrap demand in Europe is notably lagging behind supply, according to Italian steel trade association Assofermet. The European recycling industry collects around 100 million tonnes/year of waste metal, with the union effectively utilising about 80%, leaving 20% unutilised.
Unlike Italy, where a significant majority of steel production relies on electric arc furnaces, the remainder of European steel is predominantly produced through blast furnaces. The 20% scrap exported “is not a theft that is perpetrated to the steelmaking sector but rather the consequence of the structural decline in European steel production,” Assofermet president Cinzia Vezzosi said at Made in Steel in Milan attended by Kallanish last week.
“As the production decreases, the availability of that type of material [scrap] increases,” she added.
In order for the industry to continue to have technologically sophisticated recycling businesses, they must maintain their operational margins and be allowed to export the surplus of scrap.
Assofermet is urging the European Commission to take this perspective into account when evaluating its steel action plan. Scrap is not merely a resource, said Vezzosi; it holds strategic importance and is available for the European steelmaking industry.
This comes in response to European steelmakers’ attempts to ban scrap exports. Steelmakers are struggling to secure a ban on the export of 18 million tonnes of scrap that departs from Europe annually, with Antwerp being a significant point of departure.
“We have been engaged in discussions for 11 years regarding a duty equivalent to the CO2 that has been paid on that scrap. The scrap is directed towards nations that are excluded from the ETS protocols, thereby gaining an unfair competitive advantage over us. We have managed … to have this approved in the European Parliament. Then when we returned to the Commission, the Germans obstructed it,” Gozzi said at the trade show (see Kallanish passim).
Meanwhile, Assofermet believes the Steel & Metals Action Plan is not addressing the industry’s key issues. The proposed measures are vague and only outlined in general terms.
“The Plan focuses on issues and aspects that affect production but does not consider, except in a completely lateral way, the main problem that is causing the decline of the European steel industry: the lack of demand … It is now crucial to enhance the market demand that has diminished over the years …[and] prevent EU steel production from further declining, damaging the entire supply chain, including end-users,” the association says in a note.
Natalia Capra France
